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Contentious clause causes public works to clarify warship gag order

The Public Works Department has attempted to smooth the waters with the defence industry and issued a clarification on its demand that bidders, vying to design the navy’s new warships, refrain from talking about the program in public and attacking each other in the media.

The Liberal government faced a backlash last week from contractors and business publications over the requirement, which officials insist was meant to ensure an orderly bidding process.

But two defence observers say the demand is more about avoiding the kind of political fiasco that engulfed the F-35 program, than it is about keeping contractors on the same page.

Officials at public works have had to stickhandle around the contentious clause since it was revealed last week in a leaked copy of the request for proposals, which was obtained by CBC News.

The government opened bidding to 12 pre-qualified companies for the design and equipping of an undetermined number of warships intended to replace the navy’s fleet of dozen patrol frigates and three command destroyers.

‘The clause will effectively stifle any public debate about the procurement.’
– Danny Lam, defence analyst

Normally cut-throat contenders, their subcontractors and employees are not allowed to make “any public comment, respond to questions in a public forum or carry out any activities to either criticize another bidder or any bid — or publicly advertise their qualifications,” according to the leaked draft, dated Oct. 9, 2016.

The behind-the-scenes response was swift and prompted public works officials to issue a clarification late Friday that the industry is “free to communicate as it sees fit.”

Debate chill

Danny Lam, an analyst in environmental engineering and defence issues, says regardless of the government’s “backtracking” the restriction imposes a far-reaching chill over one of the most important military projects in a generation.

“The clause will effectively stifle any public debate about the procurement,” said Lam, who also spent 25 years in the microelectronic industry.

The former Conservative government “lost control of the public debate over the F-35” stealth fighter and this is the bureaucracy’s attempt to ensure it doesn’t happen again, Lam added.

“I take government officials at their word, but I suggest this is a tool that can be disastrously misused.”

Dave Perry, an analyst at the Canadian Global Affairs Institute, said the language was pretty clear and the message was received.

“I don’t understand how it could have been misconstrued: ‘You shall not speak in public,'” said Perry. “It’s an attempt to keep the competition out of the headlines.”

Hampering informed debate

Lam said he’s now worried there will be no serious, enlightened dialogue around the specifics of what capabilities the new warships should —  or shouldn’t have — either in the editorial pages and before Parliament.

Taken at face value, Lam says the restriction would prevent companies from working with analysts and academics, and even answering questions from MPs and senators.

“The chilling effect of this clause effectively means there will be no informed debate in Canada especially on the Canadian specific issues,” said Lam, who cited the politically-sensitive issue of whether the new warships should come equipped with ballistic missile defence against rogue nations such as North Korea.

But Lam also says there are concerns within industry about how emerging technologies, such as electromagnetic rail guns, will affect ship design and power requirements

The navy has spent years developing its list of capabilities and expects to acquire an off-the-shelf design that will be able to evolve as technology changes, a senior defence official said during a briefing about the tender call last week.

Lam said he wonders how the government and its prime contractor — Halifax-based Irving Shipbuilding —  would enforce the clause and what the criteria might be.

Shipbuilding Deal 20130307 TOPIX

Technicians work on a hull at Halifax Shipyard in Halifax on Thursday, March 7, 2013. The Irving-owned facility is the federal government’s go-to yard for combat vessels, including the multi-billion dollar frigate replacement program. (Andrew Vaughan/Canadian Press)

For instance, Canadian companies interested in burnishing the credentials by promoting what they have an offer for the frigate replacement program would be out of luck during the bidding and evaluation process.

“Based on this clause, they [would] be forbidden from discussing their merits in their home market if they bid on the [Canadian Surface Combatant] contract,” Lam said.

Gag order miscontrued?

Federal officials insist they are not trying to limit the activities of bidders, nor short circuit public discourse.

They say they only want to “respect and preserve the integrity of the solicitation process” as the Liberal government goes about making decisions on the program, which will cost taxpayers tens of billions of dollars over the next four decades.

“We are not interested, for a moment, in hampering freedom of expression,” said Lisa Campbell, the assistant deputy minister of acquisitions at public works, during a technical briefing on the program.

“However, we are very interested that the rules around bid submission, bid evaluation are respected so that our process remains fair, open and transparent.”

And in a what may be a nod to the kind of toxic political debate that consumed the fighter jet purchase, Campbell said the government wants to make sure that the frigate replacement program is driven by facts, not opinion.

“We want to make sure it does not get unduly influenced by ‘other information sets’,” she said.

“They want to receive accurate representations on what’s on offer and that we focus on what companies have to provide in the bid process.”

The F-35 Effect

The former Conservative government announced in 2010 that it intended to buy 65 F-35 stealth fighters from U.S. defence giant Lockheed Martin.

The cost estimates were questioned by the Opposition, the parliamentary budget office and later the auditor general.

Both the departments of National Defence and Public Works were accused by the auditor Michael Ferguson of not doing their homework and not accurately reflecting the lifetime cost of the jets.

The controversy forced the Conservatives to put the program on hold.